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Month: May 2015

In 2009 the DIFC Courts Set up a Pro Bono programme which addressed the ongoing need within the community for access to justice. The programme is a first of its kind in the region and ensures that every member of the community is given access to a lawyer or legal representative even when they cannot afford to pay for it.Â

All of the services offered as part of the Pro Bono programme, ranging from basic advice to full case management and representation in proceedings, will be delivered to eligible individuals approved by the DIFC Courts’ Registry office.

We are pleased to announce that Davidson & Co have made an application to the DIFC Courts to be included on the list of firms which offer Pro Bono services. This highlights our ongoing commitments to providing professional services within the local community.

We are delighted to announce the opening of our new office in Geneva, Switzerland.

Professionals the world over face daily challenges in dealing with diverging cultures, systems, practices and languages, alongside the demands of modern business and as a firm Davidson & Co. are acutely aware of these challenges.

Davidson & Co was established in the UAE in 2008, at a time where the world started to feel the pressures and challenges thrown up by the global econimic crisis. Davidson & Co has, in any event, excelled in the areas of corporate and commercial law and dispute resulotion and now sits as one of the pre-eminent boutique commercial law firms the UAE. With many of our clients conducting business between the axis of two of the main financial centres of Switzerland and the UAE, Davidson & Co.’s burgeoning office network now allows a full service offering to those clients.

On 22 January 2012 the United Arab Emirates ratified the double tax treaty between Switzerland and the United Arab Emirates. A treaty which further strengthens the ties between two of the world’s leading business hubs.

Davidson & Co. Geneva provides services to private clients, companies and institutions. Geneva prides itself on being a worldwide centre for diplomacy and for offering a neutral platform for the resolution of international disputes. Davidson & Co. has a renowned arbitration practice which now reaches across the Middle East and Central Europe.

Labour law issues in the UAE are governed by Federal Law No. 8 of 1980 Regulating Labour Relations (as amended) (the “Labour Law”). In addition, some other areas of Dubai such as the Dubai International Financial Centre as well as some of the free zones in the UAE, such as the Jebel Ali Free Zone have their own particular labour laws and regulations.

The Labour Law is a widely drafted piece of legislation which contains provisions relating to all the main aspects of employment that you would expect. These include amongst others, matters relating to salaries, holidays, working hours, employment contracts, termination of employment contracts, end of service benefits and disciplinary matters. We will be focusing on some of the most topical aspects of the Labour Law in this newsletter.

A particularly issue of late for M.A.C Davidson, has been clients (both employees and employers) requiring advice and clarification on their rights and obligations following the termination of employment. Specifically, the issue that tends to cause the most disputes is the question of what (if anything) the employee is entitled to following termination. To answer this question, we therefore need to look at the provisions in the Labour Law relating to termination and end of service benefits. The main points to consider can be summarized as follows:

The term “basic wage” is defined in the Labour Law as an employee’s wage excluding all allowances.

The reference to “basic wage” is important because it is this figure that is taken into account when calculating the end-of-service gratuity, which is determined on the basis of an employee’s last basic wage received.

Upon termination of an employment contract, an employee may be able to claim all or any of the following:

For unlimited contracts:

Where the termination of the employee’s contract is not for reasons of severe misconduct (such as those set out in Article 120 of the Labour Law), then the employee is entitled to a notice period, or payment in lieu of the notice period.

Compensation for unreasonable dismissal if the contract was terminated arbitrarily by the employer. This provision in the Labour Law is slightly ambiguous as it does not provide a clear definition of arbitrary dismissal. In any event, any claim for arbitrary dismissal by the employee is only up to a maximum of three months of the last salary paid by the employer.

For fixed contracts:

Compensation of an amount equivalent to the period until the end of the fixed contract, or three month’s wages, whichever is lower.

For both unlimited and fixed contracts

End of service gratuity. If an employee has completed at least twelve months in continuous employment with that employer, then they are entitled to payment of an end of service gratuity upon the termination of their employment. The end of service gratuity is calculated as follows

21 days wages for every year of employment completed, and for each year of the first five years of employment.

30 days wages for each additional year of employment after five years, subject to the limitation that the total of the gratuity does not exceed two years salary.

Restrictions on the payment of the end of service gratuity are as follows:

In the event that termination is for reasons of severe misconduct (as mentioned above) then the employee is likely to lose the right any end of service gratuity.

In the case of an unlimited contract, if the employee resigns from their employment, then the gratuity payable is reduced to:

7 days for the first three years of employment

14 days for the fourth and fifth years of employment

Full severance pay as above for employment exceeding five years.

In the case of a fixed contract, if the employee resigns then they are only entitled to payment of an end of service gratuity if they have been in employment for more than five years.

Repatriation expenses. It should be noted that the right to repatriation expenses will depend on the circumstances of the individual case.Â As a general guide, you should refer to the employment contract to clarify whether furniture and goods are included as well as repatriation of family members. In addition, repatriation is to normally the point of hire or alternatively where mutually agreed upon, and will not apply if the employee remains in the UAE and obtains a new job with a different employer. In that situation, the new employer takes over the responsibility for repatriation. In addition, in some cases, the employee may lose the right to repatriation expenses if they resign from their employment.

Payment of an amount equivalent to any annual leave not taken by that employee and which has accrued to that employee.

Payments for overtime or any balance of wages which have not yet been paid by the employer.

The above is designed as an introduction to the Labour Law in the UAE and a brief summary of some of the present topical issues, in particular termination of employment.Â In any situation the individual facts of the employment and the circumstances surrounding the termination would need to be fully explored.

For further information on how we can assist you in your enquiries regarding labour laws, or to discuss in more detail the general principles raised above, please contact us on 04 343 8897 where one of our team will be delighted to assist you.

Although the UAE is ranked as one of the top expat destinations in the world, there is an increasing concern of rising costs of living, despite the attractive employment prospects offered by the country.[1] A main contributor is no doubt the rental market, with expatriates still favouring to lease rather than own their homes, despite staying in the region for several years at a time. As a result, there is a growing demand for temporary housing, which inevitably results in more and more rental disputes between landlords and tenants.

While this area has been regulated for several years, it can still be a confusing task to navigate one’s way around the various provisions of the applicable laws, especially when there is a large amount of conflicting information available as a result of the wrong advice offered by non-qualified persons.

It is also important to bear in mind that this area of law is largely intended to protect the tenant, therefore as a landlord it is imperative to understand the intricacies of legitimate rental increases and the ways in which evictions can be carried out. Whilst these are essential subjects to note from the perspective of a tenant as well, it is always a good idea to consult a lawyer at a time of dispute, in order to obtain clear and qualified advice on your rights in staying in the property under the reasonable terms and conditions originally agreed between the parties.

Davidson & Co. have represented numerous clients in rental disputes and can assist you with any queries you may have in this regard. We offer a comprehensive and specialised legal service, which is aligned with our clientsâ€™ interests and aims to achieve the sought outcome in the quickest and most cost-effective manner. Our firm prides itself in offering a personalised boutique service where we make our clients’ priority of our own.

With the rapidly swelling influx of expatriates into the UAE each year, conditions of employment are increasingly in focus both from the perspective of employees and those offering career opportunities. According to the latest results of the UAE’s National Bureau of Statistics, only 3.2% of expats were unemployed in 2013[1], which suggests that our occupation is the overarching dynamic that underpins our society in the UAE. In short, work matters.

From notice periods, to sick leave and gratuity, employment is an all-encompassing concept of rights, entitlements and safeguards codified by the UAE Labour Law, and despite the existence of several free zones and the federal nature of the country, the Law is applied across the UAE, with the exception of the Dubai International Financial Centre (DIFC). Although most free zones have developed their own employment rules and regulations, these are nevertheless based on the Labour Law, which cannot be varied, unless it is to the advantage of the employee.

This is a subject that affects companies and employees equally. For business owners, it is important to consider, for instance, whether their confidential information is adequately protected through the safeguards of a non-disclosure and non-competition agreement, or whether their employment contracts are aligned with the Law. For employees on the other hand, it is fundamental to be familiar with the basic rights and know for example, that if they do decide to, they must pursue their grievance within the one-year-time-limit in the competent labour court.

Davidson & Co. have represented numerous clients in employment-related matters and can assist you or your business with any queries you may have in this regard. We offer a comprehensive and specialised legal service, which is aligned with our clients’ interests and aims to achieve the sought outcome in the quickest and most cost-effective manner. Our firm prides itself in offering a personalised boutique service where we make our clients’ priority of our own.

Davidson & Co, as part of their newsletter series are pleased to provide you with an overview to trademark registration in the UAE, our specialist team are on hand to provide more information and to answer questions not only on trademarks but on any other aspect of doing business in the UAE.

Trademarks are a valuable form of intellectual property and stand as a distinctive indicator, which all businesses or legal entities should have as a necessity, in order to identify their products or services to their consumers. A trademark enables a company to distinguish its particular products or services from those offered by other businesses.

Trademarks offer a very effective marketing tool for new and existing business owners who wish to announce their presence in the market and establish themselves as reputable companies. Moreover, trademarks can help increase exposure in the marketplace and set a company apart from its competitors. There is, therefore, a great deal of importance placed on businesses and business owners to have their trademark(s) registered, securing protection of their mark(s) and guaranteeing the exclusive right of use when identifying products or services.

The UAE Government has taken commendable steps to put in place robust trademark laws, which allows a trademark to be registered for renewable periods of 10 years* and secures its validity across all seven Emirates of the UAE. The current approach towards the protection of trademarks and the mechanisms through which such protection is carried out in the UAE are very similar to those used in Western jurisdictions such as the International Classification of registering a ‘product’ or ‘service’.

To ensure businesses and business owners the best chance of having their trademark successfully registered, Davidson & Co recommend that a pre-filing advice is obtained in respect of the registrability of the proposed trademark, the products and services to be claimed and searching for potentially conflicting earlier registered marks.

Businesses that wish to register their trademark in the UAE will require a select suite of documents all of which Davidson & Co can advise upon and assist with obtaining. The documentation will vary based on the ‘product’ or ‘service’ covered by Â trademark registration. Furthermore, all products and services are divided into distinct ‘classes’. The overall cost will therefore depend on the products or services that require secure registration and which class they fall into.

Davidson & Co hold a wealth of knowledge and experience in relation to trademark registration in the UAE and can offer tailored services and advice to all businesses and business owners looking to register their trademark in the UAE.

TMI offers a comprehensive range of services, from advice in contentious or transactional matters to representation in arbitrations and the courts. Between them, TMI’s team of lawyers have decades of experience in international commercial practice, litigation and arbitration at the highest levels and are equipped to deal with almost any kind of dispute. In the past, members of the team have advised some of the world’s largest companies as well as some of the highest net-worth individuals and a number of governments, including the Government of Mauritius. TMI also has a panel of arbitrators who regularly sit in commercial disputes around the world.

Mauritius is a beautiful and diverse nation, with a thriving legal system that combines elements of the French Civil Code, the common law of England and Wales, and laws passed by the Mauritian Parliament. Increasingly, companies and individuals are choosing to establish themselves in Mauritius because of the excellent opportunities it offers for investment and trade. The Mauritian financial and construction sectors have enjoyed unprecedented growth in recent years and successive governments have demonstrated their support for international business and investment by providing significant tax incentives. Mauritius’s geographic location and its economic and political stability make it the ideal place from which to conduct business and investment in Africa, the Middle-East and Asia.

However, navigating Mauritius’s complex legal system is time-consuming and difficult and can involve significant costs and risks for those unfamiliar with the challenges it brings. Organisations and individuals seeking to carry out business in Mauritius must be confident not only that the advice they receive meets the highest global standards but also that it is based on a comprehensive understanding of both the local legal framework and the international backdrop. Consequently, the TMI team includes not only first-class international lawyers but also Mauritian solicitors and barristers. TMI’s lawyers have appeared in numerous cases in the Privy Council of the United Kingdom, the highest appeal court for Mauritian disputes.

Because of this experience, TMI offers clients something they cannot get from other firms: an international standard of legal services with an unrivalled understanding of Mauritian legal, political and cultural spheres at all levels. As a result, TMI’s clients can be confident that they will receive easily comprehensible, commercially sound, dependable advice and representation, regardless of the law and practice involved.

For more information about TMI’s services please visit our website at www.tmi-law.com

The head of the Dispute Resolution Authority of the DIFC, having obtained approval from His Highness Sheikh Mohammed Bin Rashid Al Maktoum, has established a set of rules, which will govern the DIFC Wills & Probate Registry. This means that for the first time, those who are eligible will be able to register their Will within the DIFC’s common law jurisdiction, which in simple terms will be more like what you might expect in the UK.

What do I have to do in order to be eligible and when is this likely to become available?

This will be an option for any non-Muslim individual over the age of 21 years who is seeking to record their testamentary wishes for any Dubai based assets subject to competence. I hope that the Rules will be finalised in March 2015 (or thereabouts) to enable an imminent launch thereafter.

Why is this such an exciting prospect from your point of view and what are the risks of not having a Will?

Until now, any Will would have to be registered via the Dubai Courts. The question of whether it was competent for an expat to elect that the law of their country of domicile (their ‘foreign law’) should apply to that Will was dealt with inconsistently by the Courts when it came to rely on the Will. In many circumstances the courts decided to apply the Sharia Law to these Wills, disregarding the foreign law. We were unable to say with certainty whether surviving families would be left to contest the Courts decision to apply the Sharia Law which we expect will be resolved in view of this DIFC offering. Whilst the Supreme courts would usually reverse the decisions of the lower courts, it was a time consuming and costly exercise to resolve.

If there is no Will, then without doubt, the Courts would apply the Sharia Law. Any UK Wills not registered in Dubai Courts would be considered as being the same as if there was no Will at all.

What would the application of Sharia Law mean for me?

It can be complicated as it will be dependent on what surviving family members the deceased person has at the time of death. Essentially however, the Sharia principles provide that there are predetermined percentage entitlements for specific family members. In short, the testator will not have the testamentary freedom to elect who shall inherit what from the estate.

What should I do to ensure that I can properly register a Will which shall ensure that my wishes are followed?

You should seek legal advice from a qualified practitioner to avoid the risk of family members being left in a situation where they have little or no access to funds due to blocked accounts in the event of a dispute and to ensure that your estate is sufficiently planned ahead to accommodate for the applicable laws of the region.

What is ATED?

ATED is an Annual Tax on Enveloped Dwellings and is a tax which applies to UK dwellings owned by `non natural persons` which includes UK and offshore companies. The applicable tax is determined based on the property value: properties over £2 million from 1 April 2013; reduced to £1 million from 1 April 2015 and further reduced to £500,000 from 1 April 2016.

Are there any exemptions from ATED?

Yes, on dwellings held by property rental businesses and let commercially; and dwellings held by property development companies or held as trading stock, however in both examples, these have to be registered with HMRC and tax returns require being filed.

Can Davidson & Co advise on the rules and legislation on UK tax residence and liability for individuals and companies, particularly where I am travelling regularly to the UK and/or have property there?

Yes. The rules are complex and advice should be sought to neutralize or minimize your tax risks as, in many cases, the onus is on you to ensure that you comply and failure to do so can result in significant penalties.

Our team has significant experience in working across a variety of industries and our services include bespoke and confidential advice to HNWI’s in the areas:

Annual Tax on Enveloped Dwellings (ATED) in the UK: Advising on the new obligatory UK direct tax for all homeowners with UK properties which are owned through a commercial entity or company. This includes advising clients on the HMRC’s introduction of a capital gains tax charge for all UK property disposals with non UK ownership of all types which is to be implemented from April 2015. Further, advising on key elements associated to the onus for identifying and notifying liability to the tax, to HMRC, lying with the owner; the strict financial penalties that apply; and the exemptions that can apply by virtue of putting in place key trust structures.

Offshore Trusts and Fiduciary Services: Full service trustee and advisory services in the offshore arena.

Global Visa and Residency Services: A variety of options for residency and citizenship in European and Commonwealth countries.

Expat Wills in Dubai: In depth knowledge of the Dubai laws and procedure for making wills in Dubai both under the auspices of the Dubai Courts (Notary Public) and within the Dubai International Financial Centre.

Please contact us on the below details for a free initial information email in your specific area of interest.

“If it were done…. then ’twere well it were done quickly” Macbeth Act 1 Scene VII
It would be fair to say that Shakespeare’s famous maxim was not uppermost in the drafting of the new UAE Companies law. Not only has the new legislation been many years in the making but when it did finally emerge recently there was a sense that the opportunity to introduce far-reaching change had not been taken to the extent it had been expected to. So, for example, whilst the new law does address foreign investment, the structure for foreign ownership of Limited Liability Companies retains the existing 49% cap. No changes were made in relation to the requirements for “Sponsors” or “Agents”, for foreign companies, though this may simply confirm the suggestion that this will be dealt with in separate legislation at some point in the future.
Importantly, the new law does provide fresh motivation to UAE Companies to list on Financial Markets by:
– reducing the free float requirement from 55% to 30%. which will be of particular interest to UAE Family Companies who may wish to raise external capital as it will allow the family to maintain 70% control.
– allowing founding shareholdings to sell-down as part of the IPO process (albeit it’s important to note that once the company has completed its listing any shares held by the founders which have not sold down will remain locked in for two years).
– introducing a framework for bookbuilding, allowing a much more market sensitive pricing structure for IPOs in the UAE and moving away from regulator-approved pricing.
– introducing a framework to permit Underwriting.
This is only a snapshot of one of the main changes introduced by the new law. Inevitably, the scope of change contemplated in the legislation is much wider and, as always, the devil is in the detail. Davidson & Co’s team of specialist lawyers are in a position to guide you safely through the new provisions. For more information, please contact Alex Watson